Star VMS Performers in MAT Q2 2020

Global sales of vitamins, minerals & supplements in the MAT Q2 2020 period advanced by 5.5%, a further clear upturn vs Q1 2020 and Q4 2019, and a trend that helped to offset the Q2 slowdown for CCA remedies. Faster growth in North America’s vast supplements market (+8.8%) was the primary factor underpinning the accelerating trend globally, helping the region move back ahead of Europe in terms of CHC turnover in Q2.

In this week’s blog, we take a closer look at the VMS brands driving growth at both a regional and country level. In North America, as well as the continued rapid growth of J&J’s Tylenol, two VMS ranges that performed exceptionally well among the regional Top 10 brands were Nature’s Bounty (The Nature’s Bounty Co) and Olly (Unilever). New product development, such as the launch of the Olly Ultra Softgels line in April 2020, as well as the brand’s rollout to Canada in May 2020, have boosted Olly sales.

In Asia-Pacific, the standout trend has been the exceptionally high growth of chyawanprash supplements, up 121% globally – outpacing other fast-growing prevention categories such as immune supplements (+38.6%) and vitamin C (+23.5%) – driven by accelerating demand in India. Dabur Chyawanprash (Dabur) is now India’s No.1 OTC brand, after sales more than doubled in the 12 months to June 2020 thanks to surging demand in H1 as a result of the pandemic, and the brand has now also sneaked into Asia-Pacific’s Top 10 CHC brands regionally.

In Europe, growth was more muted across the board, with Top 10 brands like RB’s Nurofen and Bayer’s Bepanthen driving growth at a regional level. However, focusing on brand performances at a country level in Europe reveals the impact of VMS brands and natural-based sleep aids on growth, with Orthomol (+10.6%) rising fast in Germany, GSK’s single vitamin brand BE-Total (+16.2%) up strongly in Italy, P&G’s multivitamin Bion 3 (+16.0%) advancing rapidly in France and sleep aids Aquilea (+13.5%) and Dormidina (+11.3%) powering Q2 growth in Spain.

As for Latin America, Sanofi’s analgesics brands Dorflex and Novalgina were two of the best Top 10 performers at a regional level, while Bayer’s Redoxon (+65.7%) was the star performer, thanks to soaring demand amid the Covid-19 pandemic. In 2019-20, Bayer rolled out Redoxon Triple Action (vitamins C + D plus zinc; positioned for enhanced immune support) in numerous local markets.

With just under a month to go, there is still time to register to join Nicholas Hall’s Asia-Pacific webinar. On 12 November, Nicholas and other industry experts will explore key trends in the region, including a look at WOW! brands, growth prospects, distribution, the very important topic of sustainability and much more. To find out more, or to register, please contact elizabeth.bernos@NicholasHall.com.

Vicks and Tylenol still driving global CHC growth

Only two CHC brands have global sales in excess of US$1bn – P&G’s Vicks and J&J’s Tylenol – and both continued to power growth in Q2 2020. Vicks, like other leading CCA brands such as Halls (Mondelez) and Mucinex (RB), recorded a slowdown in Q2 owing to the “pantry unloading” effect, and reduced levels of coughs & colds caused by lockdowns, social distancing and hygiene measures, while VMS brands like Centrum (GSK) and Nature Made (Pharmavite / Otsuka) saw growth accelerate in the second quarter.

Despite slowing growth in Q2, global No.1 brand Vicks (+8.7%) remained at the heart of the CHC market’s upturn in the MAT Q2 2020 period. Dynamic growth for Vicks was powered by double-digit rises in Latin America and North America. In the brand’s key US market, Vicks was extended in July 2020 with Vicks VapoBath Bath Crystals, a new Vicks Children’s Botanicals line, Vicks Sinex Saline and Vicks Immunity Zzzs.

Once the leading global CHC brand, Tylenol has steadily been regaining share in recent years and closed the gap on No.1 Vicks after 21.4% growth in the MAT Q2 2020 period. In its Q2 results, J&J reported double-digit growth for its OTC products, driven by Tylenol analgesics. US sales account for around three-quarters of Tylenol’s global OTC turnover, and the brand has been boosted by innovations such as the Q2 2020 launch of Tylenol Extra Strength Dissolve Packs.

Systemic analgesic Advil is still the world’s No.3 CHC brand, but growth slowed (-0.4%) in the MAT Q2 2020 period after a strong return to growth in Q1, following weaker Q2 performances in the USA and Canada. New owner GSK is hoping to revive the US performance of Advil with the August 2020 launch of Advil Dual Action, the first FDA-approved OTC combination of ibuprofen and acetaminophen (paracetamol) in the US market.

Voltaren saw growth accelerate slightly in Q2 2020, up 4.9%, helping it rise above Halls into the No.4 position in the global CHC brand rankings. In February 2020, the US FDA approved the Rx-to-OTC switch of Voltaren Arthritis Pain (diclofenac 1%), and the product was subsequently launched in May 2020. This US launch, allied with stronger growth in regions outside Europe, helped to offset a Q2 slowdown for Voltaren in various key European markets such as Germany, Italy and the UK.

Medicated confectionery brand Halls fell into decline (-0.2%) in the MAT Q2 2020 period and dropped down the global rankings one place to the No.5 spot. Available in over 30 countries, Halls is the leading global sore throat & medicated confectionery brand and takes the No.1 position in Latin America, where it grew by 2.6%, thanks to solid growth in the brand’s key regional market of Brazil. However, sales in North America and Europe declined for Halls in line with the weaker CCA trend across both regions in Q2.

Have you registered to join Nicholas Hall’s Asia-Pacific webinar? On 12 November, Nicholas and other industry experts will explore key trends in the region, including a look at WOW! brands, growth prospects, distribution, the very important topic of sustainability and much more. To find out more, or to register, please contact elizabeth.bernos@NicholasHall.com.

CHC market shows resilience in Q2 2020

In the 12 months to end-June 2020, the global retail CHC market grew by 4.6%. This marked a slowdown vs MAT Q1 (+5.6%), but Celine Waller, Group VP, DB6, said “the market has remained far more resilient than many expected”. A boom in prevention categories such as antiseptics & disinfectants (+38.7%) and immune supplements (+38.6%) has helped to mitigate the effect of “pantry unloading” following consumer stockpiling in Q1, while strong US growth in Q2 offset weaker performances in China and Western Europe.

Western Europe decelerated to 1.2% triggered principally by a decline in CCA as lockdowns and increased hygiene measures resulted in reduced incidence of respiratory pathologies. Low growth in Germany (+1.5%) and the UK (+1.9%) offset moderate declines in Italy (-0.8%) and France (-1.3%).

Asia-Pacific slowed to 2.7% hindered by a weak performance in China and declines in both Japan (-2.9%) and Australia (-1.3%) caused by loss of revenue from Chinese travellers. However, India was up 11.3% driven by chyawanprash, which more than doubled thanks to its immunity positioning.

North America posted a 6.4% upturn with strong US growth spearheaded by VMS (+8.8%) and Derma (+8.4%) – the latter boosted by a doubling in sales of antiseptics & disinfectants.

Central & Eastern Europe achieved growth of 8.6% with inflation-driven growth in Russia (+10.9%) offset by a comparatively weak performance in Poland (+5.2%), while the Middle & East Africa experienced a slight slowdown (+6.9%).

Latin America grew by 11.8% with both Brazil (+12.0%) and Mexico (+11.0%) up by double digits. VMS was the key contributor growing by 16.7% in the region.

We are pleased to announce Nicholas Hall’s Asia-Pacific webinar, which will be held on 12 November! Nicholas will be joined by several regional industry experts to explore key trends in the region, including a look at regional WOW! brands, growth prospects, distribution and much more. For further details, or to register, please contact elizabeth.bernos@NicholasHall.com.

US Herb Market Report shows dynamism of immunity supplements

In this week’s blog, we look in more detail at the American Botanical Council’s 2019 Herb Market Report, which is based on US retail sales data provided by SPINS and the Nutrition Business Journal. According to the report, US consumers spent an estimated US$9.6bn on herbal dietary supplements in 2019, an 8.6% increase vs 2018.

For the first time, CBD made the list of 40 top-selling ingredients in the mainstream channel, where it ranked 9th at just under US$36mn, up 872% vs 2018. For the second year, CBD was the top-selling botanical sold as a dietary supplement in natural retail outlets.

Sales of immune health-related ingredients also rose sharply. In H1 2020, elderberry had the second-highest increase in the mainstream channel (+241%), making it the third top-selling ingredient; it was up 126% in the natural channel. Echinacea grew by 50%+ in both channels.

Other herbal & natural ingredients that have performed well include oregano (up 75% in the natural channel and 91% in the mainstream channel in H1 2020), which is positioned for respiratory symptoms such as cough, as well as astragalus root and mushrooms / fungi-derived ingredients with an immunity positioning. According to SPINS, sales of mushrooms (other) advanced by 84% in the natural channel and an exceptional 495% in the mainstream channel.

The report indicates that while dietary supplements with immunity positioning were the primary growth driver in the US market in the first half of 2020, other VMS ingredients also performed well, particularly those with a stress or sleep positioning. As of mid-June 2020, supplement sales appear to have levelled off; but if H1 2020 is any indication, the US VMS industry is on track for another record-breaking year.

For the full report, go the American Botanical Council’s website and download the PDF link.

Also, ensure that you have registered to join Nicholas online on 30 September for an all-new hot topics webinarYou will hear about key trends, including the impact of Covid-19, Distribution, e-Detailing and Sustainability. To find out more or register to join, please contact elizabeth.bernos@NicholasHall.com.

Market Movers Q1: CCA, VMS brands among fastest movers

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In this week’s blog, we take a closer look at our newly published Market Movers data for MAT Q1 2020, which highlights the brands that performed best and worst in terms of value sales growth or decline in that period. Certain marketers like RB, which last week reported a 12% rise in its OTC portfolio in Q2 2020, have found success from having a well-positioned portfolio of power brands in fast-growing, Covid-driven CHC categories, such as cough & cold remedies (Mucinex), immunity supplements (Airborne) and antiseptics & disinfectants (Dettol).

P&G also reported double-digit organic growth of its Personal Health Care portfolio in Q2 (fiscal Q4), powered by Vicks, which continues to gain share. Vicks NyQuil / DayQuil combo packs were among the six fastest-growing brands in MAT Q1 2020, along with one of China’s leading systemic cold & flu remedies, 999 Gan Mao Ling. VMS products also featured strongly among the Top 6 fastest-growing brands, with Olly and Emergen-C performing well in the US market thanks to their stress / immunity positioning, and Double Whale Vitamin D Drops achieving high growth in China. J&J’s Tylenol, the No.1 analgesic brand globally, also continues to produce dynamic Covid-driven growth.

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Asia-Pacific was the region that underperformed most in MAT Q1 2020 – achieving just 3.4% growth vs 6.3% for North America and Europe – so it is no surprise that five of the Top 6 worst-performing brands are from China or Japan. Tonics & cure alls was the subcategory most responsible for Asia-Pacific’s relatively low growth, with category sales down 25% in China, owing to issues with donkey breeding that have resulted in rising raw material costs and subsequent price rises, affecting two brands in particular – Dong-e E-jiao and Fu Fang E Jiao Jiang – while Hong Mao Medicated Wine was affected by negative claims.

OTC tonic drinks is another VMS subcategory hit by declining sales, with a continued downturn in Japan where the old, male consumer base is retiring and brands face competition from energy drinks. Takeda’s Alinamin EX was among the brands that declined fastest in MAT Q1 2020. Another CHC subcategory affected by weaker sales in Q1 was antacids, as a result of the withdrawal of ranitidine-based antacids from the market owing to concerns around NDMA in the formulation. Sanofi’s Zantac was among the key brands impacted, with Zantac 150 in sharp decline in the US market.

Today is the last chance to pre-order our upcoming Analgesics 2020: Assessing the Current & Future Self-Care Market for Pain Relief at the discounted rate and save up to GB£1,800! Contact melissa.lee@NicholasHall.com to order or find out about special discounts available on purchases of more than one report title!

Immunity sales & NPD activity on the rise

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One of the newer CHC subcategories that appeared in the Top 10 biggest contributors to global consumer healthcare growth in the MAT Q1 2010 period was immune supplements, with the subcategory producing a 28.5% global upturn in the year to end-March 2020. Along with vitamin C products, probiotics and multivitamins, immune supplements were among several major VMS contributors to growth in the first quarter.

For 2019, our CHC New Products Tracker service recorded 95 new product developments in the herbal & natural immune stimulants subcategory, making it the 14th most active subcategory overall in the consumer healthcare market. So far in 2020, immune supplements are already in the Top 10 most active subcategories – a sign of the rapid increase in new product development in response to the Covid-19 pandemic – and we fully expect this growth in NPD activity to accelerate over the remainder of the year.

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There has been a wide array of immunity NPD activity across all regions, notably Europe, North America and Asia-Pacific. In certain markets, such as India and China, there is also likely to be a rise in sales of country-specific natural remedies (Ayurvedic medicine and TCM) positioned for immunity support, though marketers will have to be wary of government clampdowns on products that are claimed to prevent or cure Covid-19.

Notable immunity supplement launches in the USA so far in 2020 include GSK’s Emergen-C Turmeric & Ginger and Emergen-C Elderberry, available in fizzy drink mixes, and RB’s Airborne Immune + Natural Energy Ready To Drink Shot. In Europe, Neuraxpharm unveiled Preventan Clasic in Spain and Italy, while Sambcol Immuno Forte and Sambucol Kids + Vitamin C were rolled out in Germany. As for Asia-Pacific, Grandma’s Kadha effervescent tablets were launched in India and Sanofi’s Cenovis line was relaunched in Australia.

Thousands of innovations are launched every year in the global consumer healthcare market, but relatively few offer notable new benefits for consumers in terms of delivery format or formulation. Which new products are breaking through and offering a unique proposition? Where will new product development take the CHC market in future? Contact Melissa Lee (melissa.lee@nicholashall.com) today to pick up your copy of the Innovation in CHC report.

How will CHC supply chains evolve in Covid-19’s wake?

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Supply chain issues are high on the agenda of consumer healthcare marketers in the wake of the Covid-19 pandemic. Bayer said in its Q1 results that its Consumer Health division was able to respond very flexibly to significantly higher volumes and shifts in the product mix thanks to its supply chain operation. In addition, RB last week appointed Sami Naffakh as Chief Supply Officer and member of the Executive Committee, effective 1st July 2020. RB CEO, Laxman Narasimhan, said: “Throughout the Covid-19 pandemic, the global supply chain teams have worked tirelessly to step up for our consumers and our customers. As we continue to ‘navigate our new normal’, we must also start to focus on our medium-to-longer-term supply needs across the entire, diverse portfolio.”

Novartis’ supply chain has also coped well during the pandemic, thanks to the extraordinary efforts of its staff – as outlined in this report – but some companies have been harder hit. In February 2020, Blackmores downgraded its FY2020 forecast saying that, while the outbreak has increased demand for key immunity products, this has been countered by supply chain disruptions that the company expected would continue to affect China sales for at least 2-3 months.

As our graphic below shows, China is a key producer of active ingredients (APIs), and absolutely vital to the world supply of ascorbic acid (vitamin C), for example. India, which imports most of its APIs from China, has been hit hard by disruptions in the supply chain, and in March 2020 the Government banned the export of 20+ APIs to protect the supply of essential medicines in the domestic market. This had knock-on effects around the globe, however last week India’s Directorate General of Foreign Trade lifted restrictions on the export of active pharmaceutical ingredients of paracetamol.

China, IndiaIn a recent report by the Economist Intelligence Unit (EIU), called “The Great Unwinding”, more and more companies are said to be moving parts of their supply chains away from China, a trend accelerated by Covid-19, with multinationals seeking to build “quasi-independent regional supply chains in the Americas and Europe”, to ensure future resilience. In addition, the report indicates that another long-lasting impact of Covid-19 will be companies looking to store inventory in “strategic locations from where it can be easily accessed and delivered to customers”.

The pharmaceutical industry is also facing rising prices of raw material. According to data from India’s Pharmaceutical Export Promotion Council (Pharmexcil), the cost of paracetamol went up up 50-60% at the start of the Covid-19 pandemic, and the prices of vitamins increased by 40-50%. As the EIU report indicates, companies will need to think strategically about pricing models, given that “both the regionalisation of supply chains and the build-up of strategic inventories will push up final goods prices, denting a product’s competitiveness”. However, one of the upsides to this change is that “a more regionalised supply chain will offer opportunities for companies to focus more on local tastes amid a greater capacity for product differentiation”.

Very soon we will be publishing the second edition of our hot topic review, Coronavirus 2020 and its potential impact on CHCThis report from our Competitive Intelligence & Market Analysis (CIMA) division explores the response to the pandemic from CHC brands and marketers as well as the overall impact on CHC to date. You will also be able to read about trends observed so far (key categories impacted, how consumer behaviour has changed etc), how key CHC players performed in Q1 and projections for the near and longer-term.  If you have purchased the original Coronavirus 2020 Review, you will receive the 2nd edition free of charge. For more information, or to purchase your copy, please contact Melissa.Lee@NicholasHall.com

CHC market forecast to hold up well in 2020

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Forecasts released by Nicholas Hall’s CHC sales database DB6 project that the global retail CHC market is expected to slow to 3.5% in 2020 amid the Covid-19 pandemic.

  • Analgesics are expected to increase to 6.1% driven by strong sales of paracetamol-based systemics, while topicals are forecast to slow to 3.3% in spite of the switch of Voltaren in USA
  • CCA is projected to be the fastest-growing category with an increase of 6.5% boosted by coronavirus and reports of a high incidence of seasonal cold & flu at the start of 2020
  • GIs (+0.4%) and Derma (+0.8%) are expected to remain static as consumers cut back on non-essential purchases amid the tougher economic environment
  • Antiseptics & disinfectants are forecast to buck the low-growth trend in derma with a double-digit increase
  • Lifestyle CHC sales are predicted to slow to 1.8%, with erectile dysfunction (+13.2%) and sedatives & sleep aids (+7.8%) bright spots in an otherwise challenging category
  • VMS sales are expected to maintain growth of 3.4% with anticipated gains in some subcategories — notably vitamins C & D, zinc and immune supplements, offset by a deceleration in some other subcategories

The market is expected to bounce back in the longer term with a forecast CAGR 24/19 of 4.3% and CAGR 29/24 of 4.7% driven by switch, most notably of erectile dysfunction and daily oral contraceptives. CBD is not included in these retail forecasts.

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DB6 VP, Celine Waller writes: The Covid-19 pandemic has prompted an unprecedented surge in sales of certain CHC products as consumers have stocked up on essential medicines and sought products to protect their health. However, latest data points suggest that this spike has been short-lived with the market now stabilising and in some cases receding. We expect this trend to continue over the next few months, leading to a slight slowdown in CHC retail sales across 2020 in its entirety, although of course the industry is expected to be far more resilient than many others.

However, this only tells part of the story – as consumers are unwilling or not permitted to leave their homes, we expect an acceleration of the channel shift from bricks & mortar to e-Commerce. CHC sales in the Internet & Mail Order channel are forecast to increase by 22.5% in 2020. This will boost growth of the holistic “all channels” view of the market, which also includes CBD, to 5.0% in 2020 (an improvement on 4.3% in 2019). Internet & Mail Order is expected to account for 19.2% of the total CHC market within next decade, more than doubling its share from 9.4% currently. 

We are pleased to announce the latest DB6 market forecasts are now available! With over 150,000 pieces of data across 63 markets, DB6 now includes topline data across all channels of distribution, including e-Commerce! To find out more about our extensive database or to set up a free demo, please contact Kate.Holdcroft@Nicholashall.com.

Assessing Covid-19’s impact on the VMS industry

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Despite various countries going into lockdown, governments are still allowing “essential” services and businesses to remain operational, putting the role of the dietary supplements industry in the spotlight. In some countries, like New Zealand, supplement marketers are allowed to maintain their operations as long as they are supplying “essential” businesses, such as pharmacies and supermarkets. However, according to the guidance provided by New Zealand Natural Health Products, health food stores do not fit the description of “essential” businesses.

The situation is similar but more complex in the USA, home to the world’s No.1 VMS market. While essential food and drug suppliers are open for business during Covid-19 restrictions, industry leaders are working to ensure that the same applies to speciality health food stores and cannabis dispensaries. No specific federal regulation is in place, but “essential business” status is being determined at state and local level. While California most decisively classified workers supporting cannabis and dietary supplement retail as essential workers, and Illinois added licensed medical cannabis dispensaries and cultivation centres to its essential healthcare operations list, not all states have set such guidelines.

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In a letter to state governors, industry associations including the Consumer Healthcare Products Association urge that supplement supply chains remain open in all states, arguing that now more than ever, consumers need essential nutrients to stay fit and healthy and proactively reduce their risk of chronic diseases without burdening an already overstretched healthcare system. They write: “As each of you plan your own approach to this challenging issue, we respectfully request you mirror White House / Centers for Disease Control & Prevention guidelines and make special accommodation for critical infrastructure industries that specifically include not only conventional foods but all subcategories of food, including dietary supplements, infant formulas, medical foods and spices & flavours.”

As for how the Covid-19 crisis will affect the VMS market, it’s clear that some categories stand to benefit more than others. Herbal & natural immune stimulants and vitamin C supplements are likely to see the biggest boost, as long as supply chains can be maintained. In certain markets, such as India and China, there is likely to be a rise in sales of country-specific natural remedies (Ayurvedic medicine and TCM) positioned for immunity support, though marketers will have to be wary of government clampdowns on products that are claimed to prevent or cure Covid-19.

For a full analysis of Covid-19’s impact on the global CHC market, pick up a copy of our all-new Hot Topic review Coronavirus 2020 and its potential impact on CHC from Nicholas Hall’s CIMA division. Buyers of this report will also receive a situation update in six months time. For more information, or to purchase your copy, please contact melissa.lee@NicholasHall.com.

Nestle and Valbiotis in prediabetes partnership

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Last week, French-based R&D company Valbiotis signed a global long-term strategic partnership with Nestle Health Science for the development and commercialisation of Totum-63, a patented combination of five plant extracts specifically designed to reduce the risk of developing T2 diabetes in prediabetics. According to reports, Nestle Health Science will pay CHF5mn (US$5.1mn) upfront, development & sales milestone payments up to CHF66mn (US$68mn) and tiered royalties on net sales. The partnership will support Valbiotis’ work in a number of ways, including funding the latest clinical development phase until health claims are obtained in USA and Europe. 

Back in September 2019, Valbiotis released positive results from the Phase IIa study of Totum-63, revealing that it met its primary endpoint of reducing fasting blood glucose levels among 51 participants who received 5g / day or placebo for six months. The full results show that Totum-63 also met secondary endpoints, significantly reducing blood triglyceride levels by 32.2%, fatty liver index by 18.7%, arterial hypertension in hypertensive people and blood LDL cholesterol levels by 11.7% vs placebo. A preclinical study (in mice) also found that Totum-63 corrected blood levels of insulin, glucagon and glucagon-like peptide-1, hormones central to the regulation of blood glucose. At the time, Valbiotis CEO Sebastien Peltier said these results pave the way for new opportunities in “promising markets”, such as non-alcoholic fatty liver or arterial hypertension.

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Diabesity was one of the chapters in our recent signature New Paradigms report, with one section looking at the huge potential of supplements for diabetes management. However, many of these are local brands that have only managed to carve out a small niche in their respective markets. The potential for a CHC brand for prediabetes / diabetes with a truly global scale is vast. According to Valbiotis, there are an estimated 900mn people worldwide that are prediabetic, and around 700mn people globally are forecast to contract T2 diabetes by 2045.

Nicholas Hall Writes: When Nestle walked away from the Merck Consumer Health bidding in February 2018, citing high price expectations, I wondered what that meant for the Health Science strategy. To judge by Valbiotis and other recent deals, Nestle seems more interested in buying new technologies than brands. Work we’ve done recently in this category has shown that there is a large population at risk of contracting diabetes, particularly in the Emerging Markets; but this prediabetes initiative will require vast amounts of consumer and HCP education. The question is whether the Valbiotis product, in the safe commercial hands of Nestle Health Science, can persuade consumers to take a pill for a condition they don’t yet have. But it’s worth the effort and could be a significant opportunity for both parties.

Join Nicholas Hall and Everything Health in New Jersey on 8 October 2020 to explore The Future is Now! Consumer Healthcare Reimagined with an optional workshop on 9 October hosted by The CHC Training Institute. To book your place and save with the early-bird booking discount, or to find out about sponsorship opportunities, please contact elizabeth.bernos@NicholasHall.com.